Engineering & Mining Journal

MAR 2017

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 7 of 67

NEWS-LEADING DEVELOPMENTS 6 E&MJ • MARCH 2017 sure oxidation circuits) could begin as ear- ly as 2020, with first production in 2023. Barrick continues to advance an ex- pansion at its 75% owned Turquoise Ridge mine. Through the development of a third shaft, the mine has the potential to increase output to an average of 500,000 oz/y. Turquoise Ridge recorded its high- est-ever level of production in 2016, producing 355,000 oz of gold. Average throughput increased by 40%, from 1,500 mt/d in 2015 to 2,100 mt/d in 2016. Im- provements in mining intensity and reli- ability have been driven by upgrades to un- derground ventilation systems, increasing top cut mining widths, greater equipment standardization and better maintenance. The company is evaluating whether to construct a third production shaft, in- stead of installing a new ventilation shaft, which was previously contemplated as the second phase of the mine expansion. All necessary permits for a third production shaft are already in place. At the end of 2016, the Turquoise Ridge mine had 4 million oz of gold in reserves (75% basis) at an average grade of 15.1 g/mt — the highest reserve grade in the company's operating portfolio, and among the highest in the entire gold in- dustry, Barrick said. Barrick has initiated a prefeasibility study to evaluate the construction of an underground mine at Lama. The study will evaluate the use of low-cost bulk mining methods, including sublevel cave and block cave mining, designed to target high- er-value ore on the Argentinean side of the border in the initial stages of the operation. Initial ore processing at Lama would be un- dertaken using one of three partially com- pleted processing streams at the site, with a capacity of approximately 15,000 mt/d. Existing infrastructure could be scaled up to 25,000 mt/d at a later date. An under- ground mine would reduce the surface footprint of the operation and would be less susceptible to weather-related production interruptions during the winter season. AngloGold Ashanti Production Only Down Slightly in 2016 AngloGold Ashanti delivered a steady op- erating and financial performance in the second half of 2016, with production coming in at 1.9 million ounces (oz) com- pared to 2 million oz in 2015. This operat- ing result was achieved despite safety-re- lated stoppages that impacted output by roughly 60,000 oz, planned lower grades at Geita and Tropicana, and the Obuasi mine having been on care and mainte- nance since last year. These negative production factors were partly offset by a focus on tight cost control, a 14% higher realized gold price, and weaker currencies in some jurisdictions, the company said. All-in sustaining costs for second half of 2016 was $1,058/oz, higher than the $897/oz for the second half of 2015 due mainly to lower gold ounces sold, higher overall cash costs, higher brownfields ex- ploration costs and increased sustaining capital expenditure, AngloGold said. Adjusted EBITDA of $767 million, increased by 13% in the second half of 2016 compared to $679 million in the second half of 2015, due to the 14% in- crease in the average gold price received, which was partially offset by a 5% reduc- tion in ounces sold over this period. Proven and probable gold reserves at year-end of 50.1 million oz substantially offsets depletion during the year. The number of fatal accidents across the group's operations reduced by more than a third compared with 2015. Six op- erating fatalities were recorded in South Africa during 2016 and another in Brazil. Despite these setbacks, significant safety milestones were achieved last year includ- ing a fatality-free fourth quarter across all business units; 1 million fatality-free shifts at Mponeng, Kopanang and Moab Khotsong; as well as 2-million fatality-free shifts for the Vaal River Region, the compa- ny said. Moab Khotsong achieved a full cal- endar year without a fatality in September and the Surface Operations unit achieved a full year with no lost-time injury. "There is no higher priority for Anglo- Gold Ashanti than the safety of every one of its employees," the company said. "We believe that through close cooperation among stakeholders and fair application of regulations with due regard to proportion- ality, as well as continued vigilance in an unpredictable operating environment, we can further improve safety performance." Production guidance for 2017 year is estimated to be between 3.6 million and 3.755 million oz. Total cash costs are estimated to be between $750/oz and $800/oz and AISC between $1,050/oz and $1,100/oz. Capital expenditure is anticipated to be between $950 million and $1.05 billion with reinvestment at Cuiaba, in Brazil; Iduapriem in Ghana, to strip waste rock from the Teberebie ore body to extend mine life, and lower cash costs; Geita, in Tanzania, to replace the mine's original 20-year old power plant to ensure reliable electricity supply, and also continue the ramp-up of underground production in advance of depletion of open-pit ore in the future; at Sunrise Dam, in Australia, where investment in plant modifications are expected to improve gold recoveries; and at Kibali, in the Democratic Repub- lic of Congo, where additional ore reserve development will be conducted ahead of a ramp-up in underground production. Sibanye Receives Bank Approval for Acquisition of Stillwater Mining Sibanye Gold Ltd. announced on Febru- ary 21 it had received the approval of the South African Reserve Bank, as required in accordance with the Exchange Control Regulations of South Africa, with respect to the proposed acquisition of Stillwater Mining Co., which was announced on De- cember 9 and is valued at $2.2 billion. The transaction remains on schedule for closure during the second quarter of 2017 and subject to the approval of the holders of Stillwater and Sibanye. "We are extremely pleased to have received another important regulatory approval, which takes us another step closer to concluding this transformative transaction," said Neal Froneman, CEO of Sibanye. "Management remains focused on ensuring that the remaining conditions are met and will notify stakeholders as further progress is made." Sibanye is headquartered in South Africa and is that nation's largest pro- ducer of gold from domestic mines. The company has recently expanded into pro- duction of platinum group metals (PGM) through the acquisition of mining assets. Stillwater is the only U.S. miner of plat- inum group metals, with two mines and a metallurgical processing complex in south-central Montana. Paris Court of Appeal Decides in Favor of Gold Reserve Gold Reserve announced on February 7 that the Paris Court of Appeal rejected all of Venezuela's arguments and issued (Continued on p. 12)

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